Global fertilizer markets have undergone a notable rebound in 2024–25, but rising energy costs, policy uncertainties and affordability challenges continue to shape the outlook for 2026, according to the FAO’s November 2025 Fertilizer Market Update.
After two years of decline, global fertilizer utilisation rose 6% in 2024 to 200 million tonnes of nutrients, nearing the 2020 record. Nitrogen use reached 115 million tonnes, the highest in history. This resurgence was driven largely by lower fertilizer prices in early 2024 and supportive policies, including increased urea subsidies and reduced GST on agricultural inputs in India. China also boosted nutrient use to enhance agricultural self-sufficiency.
Potash demand rebounded sharply, particularly in Brazil, China, Indonesia and Malaysia, where improved affordability encouraged increased application. Phosphorus demand, however, showed only partial recovery and remained weak in South and East Asia due to continued high phosphate prices.
On the supply side, nitrogen and potash production rose sharply in 2024–25. However, utilisation levels at fertilizer plants remained below historical peaks as global capacity expansion continues to outpace demand. Phosphate production capacity grew slowly, keeping plant utilisation steady. Overall, nutrient capacity is projected to rise 2% annually through 2030.
Energy markets remain a critical factor, as natural gas is a key input for nitrogen fertilizers and several phosphate products. The Dutch TTF gas benchmark surged to EUR 58/MWh early in 2025 due to cold weather and low wind energy output, before falling to EUR 32–33/MWh by September amid ample LNG arrivals. This volatility continues to affect production costs, particularly in Europe.
Fertilizer prices peaked in 2022 and eased in 2023–24, but rose again in early 2025. By September 2025, the fertilizer basket price averaged USD 489/tonne, up 46% year-on-year, though still well below the 2022 peak of USD 815/tonne. Nitrogen prices rose 23%, phosphates 21%, and potash 13% in the first nine months of 2025.
Market uncertainty remains due to geopolitical tensions, maintenance-related supply disruptions and fluctuating demand from major importers such as Brazil and India. Towards late 2025, nitrogen and phosphate prices softened as high prices dampened demand.
With fertilizer affordability declining again, FAO warns that global usage could fall in early 2026 unless prices stabilize and energy markets remain predictable.